FRENCH ZONES

Decree 906/94

Bs. As., 10/06/1994.

VISTO the Bill registered under No. 24,331, and

CONSIDERING:

That the bill empowers the national executive branch to create a free zone in the territory of each province.

Article 2 states that, in addition to the free zones provided for in the first paragraph of this article, the creation of other commercial free zones in the cities or villages of its jurisdiction that are bordered by neighbouring countries; ports or waterways that possess free zones anywhere in the territory is permitted.

That this possibility will generate the existence of such a number of free zones, which removes them from the reality of the market by their overlap and by the requirement of private investors that would demand their establishment.

Article 9 empowers the National Executive Branch to authorize retail trade operations in a free zone in cities or border towns with neighbouring countries that possess free zones anywhere in its territory.

That in the second paragraph it is stated that this type of retail sales can be made in those provinces whose demographic density is less than DOS (2) inhabitants per square kilometer.

That this tax description would exclude from the possibility of retail sale to provinces that meet the requirements of the first paragraph.

It has also been added a title III by which Article 47 establishes a Special Customs Territory in the territories known as Puna Argentina, including the Departments of Antofagasta de la Sierra (Provincia de Catamarca), Los Andes (Provincia de Salta), Susques, Rinconada, Santa Catalina, Yavi and Cochinoca (Provincia de Jujuy).

In addition, the Article establishes a Special Customs Territory in Southern Patagonia, including the Departments of Río Senguerr and Futaleufú (Provincia de Chubut), Desiredo, Lago Buenos Aires (Provincia de Santa Cruz) and Municipality of Sierra Grande (Provincia de Río Negro).

Article 48 defines that such Special Customs Territories shall have the characteristics defined in Article 2, paragraph 3, of the Customs Code, and as defined in Articles 600, 602,603, 604, 605,606 and 607 of that Code.

Article 49 states that taxes that seriously import for consumption and export for consumption shall be QUINCE BY SCIENT (15 %) of those that govern in the General Customs Territory.

That the creation of Special Customs Territories contradicts the spirit of economic policy as to the non-establishment of exceptions to the General Customs Territory other than the frank areas defined in the original draft.

That previous experiences in this area have generated negative results, and it is therefore not appropriate to increase the establishment of these Territories.

Article 50 extends the benefit of a free zone to the Federal Capital.

That the National Executive Branch initiative is aimed at enabling regional economies, particularly those involving economically less-favoured provinces, to establish free zones away from one of the main consumer and supply centres in the country.

It should be borne in mind that the free zones, while important, are not the exclusive instrument for solving the problems of provinces or regions.

That it is considered instead to be useful tools within the framework of a transformation and development plan that identifies the potential of each region and places them according to a medium- and long-term vision.

Accordingly, it is appropriate to observe the second, third and fourth paragraphs of Article 2, paragraph 2 of Article 9 and Articles 47, 48, 49 and 50 of Bill No. 24,331, making use of the power conferred on the National Executive by Article 72 of the National Constitution.

Therefore,

THE PRESIDENT OF THE ARGENTINA NATION:

RIGHT:

Article 1 Note the second, third and fourth paragraphs of Article 2 of the Draft Law registered under No. 24,331, which read: "Without prejudice to the existence of free zones created or to be created, under the provisions of the preceding paragraph, the National Executive shall agree with the provincial governments the establishment of free trade zones in the cities or villages of its jurisdiction that are bordering areas with neighbouring countries or ports

"French zones to be created within the same region must establish a profile and functionality that configures the specific role that justifies its creation in the framework of the objectives of Article 4o, not being able to establish more than one by province, except the exceptions set out in paragraphs 1 and 2 of this article"

"For the purpose of authorizing the creation of a free zone, whatever its location, the respective provincial executive branch, will require the concessionaire a minimum investment."

Art. 2o- Note the second paragraph of Article 9 of the Draft Law registered under No. 24,331, which reads: "In those provinces whose demographic density is less than DOS (2) inhabitants per square kilometer, the National Executive Power may authorize the operations planned anywhere in its territory."

Art. 3o- Note Articles 47, 48, 49 and 50 of the Bill registered under No. 24,331, which read:

"Article 47 - Become a Special Customs Territory in the territories known as Puna Argentina, including the departments of Antofagasta de la Sierra (Provincia de Catamarca), Los Andes (Provincia de Salta), Susques, Rinconada, Santa Catalina, Yavi and Cochinoca (Provincia de Jujuy).

"A Special Customs Territory is also established in Southern Patagonia by understanding the

Departments of Río Senguerr and Futaleufú (Provincia del Chubut), Desiredo, Lago Buenos Aires (Provincia de Santa Cruz) and Municipality of Sierra Grande (Provincia de Río Negro) with the jurisdiction and extension necessary to fulfil their duties."

"Article 48 - The Special Customs Territory established or established by the preceding article shall have the characteristics defined in Article 2(3) of the Customs Code and the modality and scope established in Articles 600, 602, 603, 604, 605, 606 and 607 of the Code."

"Article 49 - In accordance with Article 600 of the Customs Code, taxes that seriously import for consumption and export for consumption shall be 15% of those that govern in the General Customs Territory."

"Article 50 - Please note that the references made in this law regarding the provinces and provincial governments include the territory of the Federal Capital and the Municipality of the City of Buenos Aires."

Art. 4th - With the exceptions set out in the preceding articles, please refer to the National Act as the Bill registered with No. 24,331.

Art. 5o - Contact, post, give to the National Directorate of the Official Register and archívese - MENEM. - Domingo F. Cavallo. -